GRANTS & LOANS FOR RENEWABLE ENERGY AND ENERGY EFFICIENCY PROJECTS. Ron Omann, State Energy Coordinator - Minnesota June 18, 2015

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1 GRANTS & LOANS FOR RENEWABLE ENERGY AND ENERGY EFFICIENCY PROJECTS Ron Omann, State Energy Coordinator - Minnesota June 18, 2015

2 USDA Rural Development s REAP Program 2 Programs 2 Types of Funding 2 Energy Sectors 2 Types of Applicants

3 REAP Renewable Energy Systems and Energy Efficiency Improvement GRANT = Up to 25% of Eligible Project Costs Renewable Energy Systems Minimum Grant Request Maximum Grant Request $2,500 Total eligible project costs > $10,000 $500,000 Total eligible project costs > $2 million Energy Efficiency Improvements Minimum Grant Request Maximum Grant Request $1,500 Total eligible project costs > $6,000 $250,000 Total eligible project costs > $1 million

4 REAP Renewable Energy Systems and Energy Efficiency Improvement GUARANTEED LOAN = Up to 75% of Eligible Project Costs Minimum Loan Amount $5,000 Total eligible project costs > $6,667 Maximum Loan Amount $25 million Total eligible project costs > $33.4 million Details USDA guarantees a commercial loan; applicant must have a willing lender. Terms are negotiated between the lender and borrower. Fees, appraisals, equity & collateral requirements apply.

5 Rural Business-Cooperative Service Energy Programs GUARANTEE 85% for loans $600,000 or less. 80% for loans over $600,000 up to $5 Million 70% for loans over $5 Million up to $10 Million 60% for loans over $10 Million USDA Rural Development - the leading advocate for rural America at the federal level.

6 Eligible Applicants Agricultural Producer Rural Small Business Individual or entity that receives 51 percent or more of their gross income from agricultural production crops, livestock, aquaculture, forestry operations, nurseries, dairies For-profit small business - as defined by the Small Business Administration (SBA) Rural area or non-metro community of < 50,000

7 Improve Profits for Your Rural Small Business, Farm or Ranch with REAP Energy Efficiency Lighting Heating Cooling Ventilation Fans Automated Controls Insulation Renewable Energy Solar Wind Small Hydroelectric Anaerobic Digesters Biomass Geothermal Wave/Ocean Power The technology must be commercially available. Research and development projects do not qualify.

8 Eligible Project Costs Equipment: Purchase & installation New or refurbished Post-application construction & facility improvements Retrofitting Professional service fees Permits & license fees Second Meter Working capital, land acquisition, (Guarantee loan ONLY with restrictions) Refinancing Debt (Guarantee Loan ONLY; <50% of Total Project Cost) Ineligible Project Costs Residential energy projects Equipment: Farm tillage equipment Used equipment Vehicles Pre-application construction & facility improvements Application preparation or grant writer fees Line of credit Lease payments Payment to the applicant/business owner, beneficiary, or relative

9 REAP Application Window Closing Deadlines June 30, 2015 October 31, 2015 April 30, 2016 Continuous Application Cycle Grant Request $20,000 or less not competing for set aside Grant Request > $20,000 Combination Grant/Loan Request Grant Request $20,000 or less Combination Grant/Loan Request Grant Request $20,000 or less not competing for set aside Grant Request > $20,000 Combination Grant/Loan Request Guaranteed Loans *Loan must score a minimum of 50 to compete monthly *Monthly competitions have now started next May 1, 2015

10 Application Process Application requirements under all three tiers have been streamlined reducing the time required to prepare applications Form RD A Form RD B Form RD C

11 Contact the USDA Rural Development in your state or region for application materials and resources Submit applications any time of year. Applications compete for funding based on score. How to Apply

12 REAP Funding Availability 2015: $80M in Grant; $200M in Guaranteed Loans 2016 & Beyond: $50 M appropriated $40 M Grant $10 M Loan (Budget Authority) Discretionary Funds are possible

13 Btu/Grant Dollar Requested (10) Energy Saved, Replaced, Generated (15) Environmental Benefits (5) SCORING PROJECTS 8 Criteria = 100 points: Matching Funds (20) Size of Applicant (10) Previous Award (15) Simple Payback (15) State Direct/Administrator (10)

14 Using Scoring to Determine Funding Potential High Scoring Projects Include: High Percentage of Saving/Replacement of Current Energy Usage Large energy saving/generation per Grant dollar Short Simple Payback Timeframe High Scoring Applicants Include: Small Size of Operation Under represented/unserved Groups

15 Applicant & Scoring Trends Agriculture Producers Low threshold for size ($750,000) Look for other industries (NAICS) which may fit

16 Project & Scoring Trends Lighting Projects (High % Saving & Energy saved/grant, low paybacks) Grain Drying Equipment (Mid-Energy saved/grant & % Saved, High paybacks) Solar (Low energy/grant, High Replacement, Less 25yr payback) Wind (Low energy/grant, High replacement, Less 25yr payback) Geothermal (Low energy/grant, Low replacement, Better Payback than wind & solar

17 REAP Energy Audit and Renewable Energy Development Assistance mncerts.org/greatrenewables

18 CERTs: Minnesotans Building a Clean Energy Future Mission: We connect individuals and their communities to the resources they need to identify and implement community-based clean energy projects

19 Rural Energy for America Program (REAP) Ron Omann, Minnesota Energy Coordinator USDA is an equal opportunity provider and employer. To file a complaint of discrimination, write: USDA, Office of the Assistant Secretary for Civil Rights, Office of Adjudication, 1400 Independence Ave., S.W., Washington, DC or call (866) (Toll-free Customer Service), (800) (Local or Federal relay), (866) (Relay voice users).